Munich Personal RePEc Archive

How the corporate governance mechanisms affect bank risk taking

Mamatzakis, Emmanuel and Zhang, Xiaoxiang and Wang, Chaoke (2017): How the corporate governance mechanisms affect bank risk taking.

[img]
Preview
PDF
MPRA_paper_78137.pdf

Download (1MB) | Preview

Abstract

The effectiveness of the management team, ownership structure and other corporate governance systems in determining appropriate risk taking is a critical issue in a modern commercial bank. Appropriate risk management techniques and structures within financial institutions play an important role to ensure the stability of economy. After analyzing 43 Asian banks over the period from 2006 to 2014, I find that banks with strong corporate governance are associated with higher risk taking. More specifically, banks with intermediate size of board, separation of CEO and chairman of board, and audited by Big Four audit firm, are likely higher risk taking. Overall, my findings provide some new perspectives into the governance mechanisms that affect risk taking on commercial banks.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.